Consumers and Consumption

"The respondent company shall afford the engineering conference opportunity to examine its records to determine the number of its consumers, the water consumed and the revenue."

Historic Cost

"The engineering conference shall agree upon the historic cost of the property, based upon the unit prices and conditions that were current at the time the work was actually performed, actual costs from the records and contracts of the company, where available, to be used; and when not available, reasonable prices at the time of construction to be adopted; the original cost of abandoned or superseded property to be determined and listed separately."

Reproductive Cost

"The engineering conference shall agree upon the estimated reproduction cost new of the property, and the estimated reproduction cost new of the property less accrued depreciation both as of January 1, 1922; based upon the fair arithmetically averaged prices of material, property and labor, as follows:

A-For an average period of five years immediately preceding January 1, 1922.

B-For an average period of twenty years immediately preceding January 1, 1922.

C-At actual prices prevailing as of January 1, 1922.

In determining the accrued depreciation, the engineering conference shall determine the age, estimated probable life, and physical condition of all items of the property, and the accrued depreciation, based on the life, age and condition of the various items of property shall be determined in accordance with the so-called sinking fund method, bearing interest at the rate of four per cent per annum; and

on this basis of determination, shall report the annual accruing depreciation, and total accrued depreciation as of January 1, 1922."

Intangible Property

"The engineering conference shall consider and separately find, if possible, the going concern value, cost of finance value, and the amount of cash working capital which shall be included in the calculation of a rate base.'

Annual Operating Expenses

"The engineering conference shall agree upon the various items of annual operating and maintenance expense to be allowed the respondent company for the immediate future; and the engineering conference shall prepare a statement setting forth the operating expenses and the revenues of the respondent company annually, for a period of ten years immediately preceding January 1, 1922; for which determination the respondent shall furnish statements from the books of account, with the privilege to the engineering conference to examine the original records, should it so desire."

"While it is contemplated that the engineering conference (and accounting conference if there be one) shall agree upon all items yet if such complete agreement is found. impossible, then the engineering conference shall agree upon such items as to which an agreement can be reached, and report the disputed items to the Commission; and with respect to these disputed items, the parties thereto may submit evidence to the Commission, if either party so desires."

"It is further agreed that in so far as the engineering conference shall unanimously agree to any matters of fact embraced in this program of procedure, such agreement shall be conclusive upon the parties thereto, subject always,

however, to the final approval and determination of the Public Service Commission of the State of Pennsylvania.'

"It is further understood and agreed that this stipulation and program for the engineering and accounting conference does not extend to or include any issue or matters raised in the pleadings, not specifically referred to herein.'

"It is further agreed that this stipulation and agreement shall be submitted to the Commission and made of record in this case, as a part of the record thereof."

There was unanimous agreement by the engineers, constituting the engineering conference agreed upon by the parties, on the following matters thereby submitted for their consideration, to-wit:

On a schedule of the used and useful physical property: also on a schedule of the abandoned physical property, and upon a schedule of property now in existence, but not used and useful in the public service.

That the historical cost of the property, January 1, 1922, was $472,793.00, exclusive of non-operating property valued at $22,540.00, and abandoned property valued at $13,080.00.

That the reproduction cost new as of January 1, 1922, based on prices averaged over a period of five years immediately preceding that date, was $924,684.00; and depreciated $798,932.00.

That the reproduction cost new, based on prices averaged over a period of twenty years immediately preceding January 1, 1922, was $597,626.00; and depreciated $511,216.00.

That the reproduction cost new, based on prices prevailing January 1, 1922, was $722,930.00; and depreciated $617,542.00.

That respondent had made capital expenditures after January 1, 1922, up to and including August 31, 1922, of $3,642.81.

That respondent's annual operating, maintenance and depreciation expenses, for the immediate future would be $45,243.48.

That the rate schedule complained against could be expected to produce annually $79,936.61, leaving, after paying operating expenses, maintenance and depreciation, the sum of $34,693.13, for return upon the fair value of respondent's used and useful property employed in the public service.

In determining the historical cost of respondent's property, and in estimating its reproduction cost, as above set forth, the engineering conference agreed upon and included in each going concern value of $25,000.00; cash working capital in the sum of $6,000.00, and for the cost of financing, or brokerage, the sum of $20,567.00 in the historical cost estimate, the sum of $26,365.00 in the twenty-year average reproduction cost estimate, the sum of $41,583.00 in the five-year average reproduction cost estimate, and the sum of $27,291.00 in the January 1, 1922, reproduction cost estimate.

In ascertaining the historical and reproduction cost of respondent's used and useful property, the engineering conference made an extensive and careful investigation and analysis of all the property and elements of value going to make up the results arrived at by the conference, as exhibited by the following general summary of its work:

In ascertaining operating revenues, maintenance and expenses, the engineers arrived at the totals hereinbefore stated upon a detailed consideration of all the factors involved, and likewise in their allocation and distribution of costs between fire protection and all other services rendered by respondent. After a careful check of the figures of the engineering conference, and upon due consideration of all the relevant and material facts in evidence, the Commission is satisfied that the operating revenues and expense as ascertained by the conference are substantially correct and that the allocation of plant and operating costs for fire protection is just and reasonable, and all of these determinations by the engineering conferences are hereby adopted and made the findings and determinations of the Commission.

It is not necessary to determine the fair value of respondent's property used in the public service, since a careful study and

consideration of the evidence is convincing that any valuation the Commission could make, or that could be sustained, under the evidence submitted, would justify the rates under attack.

Complaint is also made against the entire body of rules and regulations in general form, but the Commission will not make any order at this time on these rules and regulations except as to those specifically referred to in the complainant's brief, namely: In Rule No. 1, the clause excepting fire service connections should be eliminated, otherwise the rule is unobjectionable if reasonably enforced. Rule No. 2 should be amended to set forth the practice of the company in allowing 6% interest on deposits, payable at the time the deposit is paid. The rule. should be further amended to give an applicant or consumer at least a general definition of the manner by which credit or financial responsibility may be established, and some measure of the amount of deposit he may be called upon to make, which amount should bear a relation to the average bill for the class of consumers taking service of comparable character and extent and to the length of the billing period; Byrne vs. Fayette County Gas Co., 6 Pa. Corp. Rep. 348; Borough of Wyoming, et al vs. Luzerne County Gas & Electric Co., 10 Pa. Corp. Rep. 172; 11 Pa. Corp. Rep. 548. The ownership and maintenance of the meter by a consumer should not be made a condition precedent to securing metered service. Rule No. 7 should be amended to provide that meters will be installed by and at the expense of the company under regulations applying equally to all consumers in the same class, and not subject solely to the discretion or arbitrary will of the company. Rendine vs. Connellsville Water Company, 4 Pa. Corp. Rep. 66; Hayes vs. Panther Valley Water Company, 5 Pa. Corp. Rep. 319; 70 Pa. Superior Ct. 8, Rule No. 16 should be amended to give the right of shut-off only after reasonable notice and opportunity for the innocent consumer to attach his pipes to a separately controlled service connection, to be provided by and at the expense of the water company. Hayes vs. Panther Valley Water Co., Supra. Rule No. 17 and the conditions set forth in the special application for private fire protection service should be modified as follows: